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For more than 35 years, Dimensional has been putting financial science to work for investors by translating compelling research into real-world investment solutions.

01

An enduring belief in the

Power of Markets

Capital Markets Have RewardedLong-Term Investors

Growth of $1 USD, Jan. 1926–Dec. 2019

In USD. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. US Small Cap is the CRSP 6–10 Index; US Large Cap is the S&P 500 Index. Treasury Bills is the IA SBBI US 30 Day TBill TR USD, provided by Ibbotson Associates via Morningstar Direct. Long-Term Government Bonds is the IA SBBI US LT Govt TR USD, provided by Ibbotson Associates via Morningstar Direct. US Inflation is measured as changes in the US Consumer Price Index. US Consumer Price Index data is provided by the US Department of Labor Bureau of Labor Statistics. CRSP data is provided by the Center for Research in Security Prices, University of Chicago. The S&P data is provided by S&P Dow Jones Indices LLC. Past performance is no guarantee of future results.

At Dimensional, our investment approach is based on a belief in markets.

Rather than attempting to predict the future or outguess others, we draw information about expected returns from the market itself—leveraging the collective knowledge of its millions of buyers and sellers as they set security prices.

Trusting markets to do what they do best—drive information into prices—frees us to spend time where we believe we have an advantage, namely in how we interpret the research, how we design and manage portfolios, and how we service our clients. We take a less subjective, more systematic approach to investing—an approach we can implement consistently and investors can understand and stick with, even in challenging market environments.

How Many Funds Outperformed Benchmarks?

Only 17% of equity and fixed income funds that were around at the start of 2000 outperformed their respective benchmarks 20 years later. Over the same period, 81% of Dimensional’s equity and fixed income funds beat their benchmarks. The figures are drawn from a selected universe of industry and Dimensional funds available in the US. Please refer to the disclosure for more details.

Performance data shown represents past performance and is no guarantee of future results. US-domiciled, non-Dimensional open-end mutual fund data is from Morningstar. Dimensional fund data is provided by the fund accountant. Beginning sample includes funds as of January 1, 2000. The number of beginning funds is 4,601 for the industry and 27 for Dimensional. Funds that are currently and were previously restricted to LWI Financial Inc. clients were excluded due to different historical fee structures. Dimensional subadvised funds are also excluded. Dimensional funds are evaluated relative to their prospectus benchmark. Each fund is evaluated relative to its respective primary prospectus benchmark. Surviving funds are those with return observations for every month of the sample period. Outperformers are funds that survived the 20-year period and whose cumulative net return over the period exceeded that of their respective benchmark. Where the full series of primary prospectus benchmark returns is unavailable, non-Dimensional funds are instead evaluated relative to their Morningstar category index. Index funds and funds of funds are excluded from the industry sample. Load-Waived funds are excluded from the sample. The return for funds with multiple share classes is taken as the asset-weighted average of the individual share class observations. Equity fund sample includes the Morningstar historical categories: Diversified Emerging Markets, Europe Stock, Foreign Large Blend, Foreign Large Growth, Foreign Large Value, Foreign Small/Mid Blend, Foreign Small/Mid Growth, Foreign Small/Mid Value, Global Real Estate, Japan Stock, Large Blend, Large Growth, Large Value, Mid-Cap Blend, Mid-Cap Growth, Mid-Cap Value, Miscellaneous Region, Pacific/Asia ex-Japan Stock, Real Estate, Small Blend, Small Growth, Small Value, World Large Stock, and World Small/Mid Stock. Fixed income fund sample includes the Morningstar historical categories: Corporate Bond, High Yield Bond, Inflation-Protected Bond, Intermediate Core Bond, Intermediate Core-Plus Bond, Intermediate Government, Long Government, Muni California Intermediate, Muni California Long, Muni Massachusetts, Muni Minnesota, Muni National Intermediate, Muni National Long, Muni National Short, Muni New Jersey, Muni New York Intermediate, Muni New York Long, Muni Ohio, Muni Pennsylvania, Muni Single State Intermediate, Muni Single State Long, Muni Single State Short, Muni Target Maturity, Short Government, Short-Term Bond, Target Maturity, Ultrashort Bond, World Bond, and World Bond-USD Hedged.

David Booth

Founder and Executive Chairman

“The number of managers that can successfully pick stocks are fewer than you’d expect by chance. So, why even play that game? You don’t need to.”

David Booth

Founder and Executive Chairman

02

Applying insights from

FINANCIAL SCIENCE

Breakthroughs in Modern Finance

1966Efficient Market Hypothesis

Efficient Market Hypothesis

Eugene Fama
Nobel laureate, 2013
Professor, University of Chicago

Eugene Fama’s efficient market hypothesis marks a pivotal moment for modern finance. The essence of the argument can be described by the simple statement that security prices reflect all available information.

1973Intertemporal CAPM

Intertemporal CAPM

Robert Merton
Nobel laureate, 1997
Professor, MIT

The ICAPM set up a theoretical framework for how multiple sources of risk could arise. It expanded on the one-period CAPM model where the only priced risk was market beta.

1981Small Cap Investing

Small Cap Investing

Dimensional Fund Advisors
David Booth, Founder
and Executive Chairman

Dimensional pioneers small cap investing with the launch of its first strategy, which offers investors diversified, efficient access to small company stocks.

A body of academic research led to identifying profitability as a dimension of higher expected returns that can be pursued across equity markets.

Today

Dimensional’s Research and Investment teams draw insight from academia, but what sets us apart is how we interpret, test, and apply that research to practical investment solutions for our clients.

Tomorrow

...

Dimensional was built around a set of ideas bigger than the firm itself. With a confidence in markets, deep connections to the academic community, and a focus on implementation, we go where the science leads, and continue to pursue new insights, both large and small, that can benefit our clients.

Eugene Fama and Kenneth French are members of the Board of Directors of the general partner of, and provide consulting services to, Dimensional Fund Advisors LP. Robert Merton and Robert Novy-Marx provide consulting services to Dimensional Fund Advisors LP.

Dimensional’s investment approach is grounded in economic theory and backed by decades of empirical research.

Our internal team of researchers works closely with leading financial economists to better understand where returns come from.

Research has shown that securities offering higher expected returns share certain characteristics, which we call dimensions. To be considered a dimension, these characteristics must be sensible, persistent over time, pervasive across markets, and cost-effective to capture.

Understanding what drives returns is the starting point. From here, we focus on fine-tuning our method of capturing them.

We structure broadly diversified portfolios that emphasize the dimensions of higher expected returns, while addressing the tradeoffs that arise when executing portfolios.

Every day our portfolio managers and traders seek to balance costs against expected returns and diversification. We work for the slightest expected gain, as every incremental improvement can add up over time.

Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission. Consider the investment objectives, risks, and charges and expenses of the Dimensional funds carefully before investing. For this and other information about the Dimensional funds, please read the prospectus carefully before investing. Prospectuses are available by calling Dimensional Fund Advisors collect at (512) 306-7400 or at us.dimensional.com. Dimensional funds are distributed by DFA Securities LLC. Nothing on this website shall constitute or serve as an offer to sell products or services in any country or jurisdiction by any Dimensional global firm. For informational purposes only. All information is given in good faith and without warranty and should not be considered investment advice or an offer of any security for sale.

Eugene Fama is a member of the Board of Directors of the general partner of, and provides consulting services to, Dimensional Fund Advisors LP.